By Aakarsh Rastogi
Edited by Madhavi Roy, Senior Editor, The Indian Economist
Well, the word rural forms an image of huts and sheds in the minds of most of the urban, civilized people and an image that evokes affection and pride in the hearts of the rural people. In this era, having an impact on something will have an impact when it has an impact on those who can impact something substantial with their impact! To make sense of all that, let me connect the rural market to the overall Economy!
Marketers of Indian products keep on introducing new goods or innovating the existing ones to keep their roots attached firmly in the dynamic market environment. But, there are companies which are growing well even with so-called less innovation. The reason behind this is that they are using their arms outside the box. They are tapping the one trillion dollar economy, i.e., the Great Indian Rural Market. Many of the businesses in India do not realize the potential of rural markets and the avenues of investment there. If you are utilising the rural areas, it implies that you are reaching out to a massive 70% of the total habitants of the country.
Providing the rural people with products and services creates the same impact that the allocation of capital creates on a worker with insufficient capital resources. The only difference is, that the worker has the capacity to utilize the additional capital efficiently, but rural folks fall short of resources to exploit and make full use of the services and products available to them because of unequal distribution of wealth. Ignoring the rural market-needs and the rural market-potential pushes both rural inhabitants and the business houses in the same hole. That is, it keeps away the rural folks from new and necessary products, and on the other hand it reduces the sale of businesses and the revenue which they can procure if they target the needs of the villagers.
So, there is a dire need of economic understanding of the potential hidden in the unnoticed rural markets. According to me, if budget allocation on R&D of the companies includes some research of the rural market base, it would be a win-win situation for both. The companies will find unnoticed areas for segmentation and, targeting & positioning of their products. In addition to that, the research will unveil the dark side of rural economic instability in India, which can help NGOs and Government Agencies to eradicate this perennial issue. Moreover, it can form a part of the companies 2% CSR expenditure. Expenditure on CSR will improve the domestic as well as the global image of the company, which in turn will lead to trust building, and trust will lead to Brand Loyalty, which will ultimately push-up the sales and profits.
Thus, we can conclude three things. Firstly, understanding the rural economy will lead to economic stability. Secondly, the firms will get new areas to extend their sales and thus lead to a rise in their revenue. Lastly, combining rural understanding with its positive effects will ultimately increase the GDP of the country, which is the target of every prosperous nation.
Thus, we need to create such an impact on our rural counterparts that even their acts can create an impact which is substantial!
Aakarsh Rastogi is a second year student pursuing B.Com (H) from Shri Ram Colege Of Commerce, University of Delhi, Delhi. He has interest in both English and Hindi Literature. He used to write articles in his leisure time by observing things and activities around him. Aakarsh is a person of reserved nature with a belief, Talk Less,Work More, Be a Silent Killer. Also, He has been Elected as the President of Hindi Sahitya Sabha, SRCC for the session 2014-15.